Corporate advisers survey shows continued rise in SME confidence

A survey from  leading alternative lender Thincats, which canvassed opinions into activity among UK lower mid-market companies from more than 100 leading debt advisors, has revealed a boost in confidence over the last six months.

Market activity is continuing to pick up following a challenging number of years, the survey found. While there is a general sense of positivity, everyone's waiting for the Chancellor’s Budget on 30 October.

Advisers highlighted that the lack of clarity on potential changes to Capital Gains Tax and what level it could reach is creating uncertainty for business owners.

Sixty two per cent of advisers stated they were seeing higher levels of activity in their pipelines in the last six months, an increase from 36 per cent a year ago. Only 12 per cent stated there was less demand.

Almost half believe there is growing demand for funding specifically from owner-managed businesses.

Macroeconomic issues are cited as the biggest constraint to deal activity, with valuation expectations and deal quality the next most significant challenges.

The general view on business valuations is that they either haven’t changed or that they have decreased in the last six months.

More than half of the advisers say they are seeing more activity from SMEs than they were six months ago this compares to just 26 per cent a year ago. There is especially a growing appetite for funding from owner-managed businesses.

Mike Hackett, Chief Commercial Officer, ThinCats, said: "Advisers have their fingers on the pulse, and they will see day-to-day how changes in the economy and regulation affect how businesses act. While it is positive to see that advisers are reporting growing appetite to lend and to borrow across the market, clearly there are concerns and activity afoot as business owners get ahead of any potential CGT."